Cisco continued its buying spree today as it announced its
intention to acquire Israeli chip designer Leaba Semiconductor for $320
million.Cisco sees this acquisition as a way to bolster its hardware catalog
with highly advanced chip technology.

“By combining Leaba’s semiconductor expertise with the Cisco
engineering team, we will accelerate our plans for Cisco’s next generation
product portfolio and bring new capabilities to the market faster,” Rob
Salvagno, head of Cisco’s M&A and venture investing team wrote in a blog
post announcing the purchase.

When the deal closes, the Leaba team will report to Core Hardware
Group, led by Cisco senior vice president, Ravi Cherukuri, according to the
blog post.

The company actually doesn’t even have a shipping product yet, R
Ray Wang, founder at Constellation Research told TechCrunch. “They haven’t even
finished their prototype. This is an acqui-hire for next generation semi-conductor
[technology]. Think networking at the chip level,” he said.

This is not the first time the Leaba founding team has launched and
sold a cutting edge chip production company, according to report in Globes, an
Israeli business publication. The founding team, which consists of CEO Eyal
Dagan and CTO Ofer Eini sold Dune Networks to Broadcom for $178 million in
2009.

Today’s news comes just the day after the company announced it was
buying CliQr, a cloud hybrid services management platform for $260 million and
just about a month after it bought Jasper Technologies for $1.4 billion.

Cisco is walking a fine transformational line here. On one hand,
the purchase pattern suggests that the company is trying to pivot from its
networking hardware roots to a business centered around services as the CliQr
and Jasper Technologies would suggest.

Much like IBM, Cisco is looking to the future and trying to use its
cash hoard to make strategic purchases to help speed up that transition.

At the same time, it’s not quite ready to give up completely on its
hardware roots and purchasing a leading-edge semiconductor company suggests
that it is still looking to a future where it can continue to lead in the
networking hardware space.